Inheritance Tax Wastage

According to a report by www.unbiased.co.uk Britons are set to waste £1.3 billion in inheritance tax this year.

Unbiased.co.uk’s annual Tax Action Report reveals that UK taxpayers will waste nearly £1.3 billion this year due to poor inheritance tax (IHT) planning. This tax wastage is only set to increase further in the future after the chancellor announced in 2010 that the threshold would remain frozen for four years at £325,000 rather than rising in line with inflation.

Inheritance tax is not only Britain’s second biggest tax wastage area but it also holds the fifth place in the list of taxes Britons most want to abolish. Despite this, almost nine out of ten (88%) people state they have done nothing in the past 12 months to reduce the amount of tax they pay.

Overall, Britain is set to waste £13.5 billion in unnecessary tax payments this year, with IHT making up 10% of the tax waste mountain on its own, the second largest area of waste. The number one area of tax wastage is through tax credits, with over £8.5 billion being lost through people failing to claim their child benefit, child tax credits, working tax credits and pension credits.

Inheritance tax is Britain’s second biggest tax waste area making up 10% of the overall tax wasted in the UK

So-called ’death tax’ makes it into the top five of taxes Brits most want to abolish

Almost nine out of ten people have done nothing in the past 12 months to reduce the amount of tax they pay

As had been expected, the 2018 Spring Statement update did not include any major tax policy announcements; rather it provided a number of consultations that suggest potential legislative changes in the future. Read more about the areas set for exploration here.